Market should get prepared for a July Fed rate hike – Amp GFX

By FXStreet Greg Gibbs, Director at Amplifying Global FX Capital, notes that the market should get prepared for a July Fed rate hike amid signs that the US economy continues to show signs of improvement.

Key Quotes

“We think the market should get prepared for a July Fed rate hike that we rate as a better than 50% chance. By July the market will be clear of the Brexit vote that is likely to result in a stay-in outcome and avert global market instability.”

“The stronger US retail sales and consumer confidence, and firm housing and CPI data suggest that the US economy is on track. The Fed may view July as an opportune time to deliver another small step towards normalizing policy without upsetting confidence and allowing scope to follow up in December, satisfying the majority of FOMC members’ March projections for two hikes this year.”

“The prospect of higher US rates should tend to support the USD. Despite firming US rates, gold continues to exhibit a positive trend and may reflect more persistent bigger picture investment flows. In which case gold may be resilient to higher US rates in coming months, but we prefer gold against …read more

Source:: FX Street